MICHEL MARTIN, HOST:
OK, here's a quick recap of what's been happening in the trade wars. President Trump said he would add 25% tariffs on Mexican and Canadian imports. They were postponed, went into effect for a few days, then mostly postponed again. He's also added taxes on steel and aluminum from around the world, which Europe says will lead to tariffs on American goods like bourbon, jeans and motorcycles. So what to do if you're a business caught in the middle? Breya Jones with Louisville Public Media has that story.
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BREYA JONES, BYLINE: Victor Yarbrough is pouring water into a large steel pot that he'll use to heat ground rye, corn and malted barley.
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JONES: He's making Brough Brothers bourbon at his distillery in West Louisville. He was in talks to get his liquor onto shelves in New Brunswick, Canada. Last week, he reached out after hearing that U.S. alcohol was being banned in several provinces.
VICTOR YARBROUGH: The response was, yes, they've had a directive from the government saying, look, don't take any alcohol. So we've effectively had that deal suspended indefinitely.
JONES: And now, starting April 1, the American whiskey industry is likely to get hit with 50% tariffs from the European Union. They are in response to U.S. tariffs of 25% on steel and aluminum.
YARBROUGH: And it just makes it extremely difficult to do any business. But, you know, ultimately, we'll see if there's some type of negotiations to take place.
JONES: He remembers tariffs of 25% on bourbon during Trump's first administration. Those were suspended when President Biden entered office. Now the EU is doubling down to 50. Jason Bailey heads the Kentucky Center for Economic Policy. He says the bourbon industry is a good target for retaliatory tariffs to hit a conservative state.
JASON BAILEY: Ninety-five percent of the world's bourbon is made in Kentucky. And so when tariffs go up or just prohibition of sales of bourbon in this case, it's going to hurt us right in the gut.
JONES: The Kentucky Distillers' Association calls the 50% retaliatory tariffs disrupting, but Yarbrough and his brothers are not deterred. He says they'll keep making Brough Brothers bourbon, vodka, rum and gin.
YARBROUGH: We have to find other alternatives to these markets, whether it be additional markets or whether it be the actual furtherance of the U.S. market. We're in 23 states right now. Is it, you know, we focus on the other 27?
JONES: As a smaller distiller, he still has options for growth. Larger brands like Jack Daniel's - they recently told their investors that tariffs would be a big disadvantage.
For NPR News, I'm Breya Jones in Louisville. Transcript provided by NPR, Copyright NPR.
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